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IPAA OGIS 2012 Energy Conference – Marathon Oil Corp

Marathon Oil Corp · Apr 17, 2012 · 63 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 1
    IPAA OGIS 2012 Energy Conference April 17, 2012 Janet F. Clark Executive Vice President and CFO Marathon Oil Corporation
  2. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 2
    Marathon Oil A Strong New E&P Company Strong and stable base assets generate significant cash 2011 Net cash provided by continuing operations - 5.4 B 2011 Proved P d reserves - 1.8 1 8 BBOE, BBOE 75% liquids li id Profitable…
  3. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 3
    2012 - 2016 Expected Capital Allocation 2012 CAPEX 4.8B Other Oth International Woodford Marathon Oil Corporation 4
  4. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 4
    Strong Base Assets and Growth Portfolio Liquids Gas Base Assets Growth Assets * Production = Available for Sale Marathon Oil Corporation 5
  5. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 5
    Base Assets Large Stable Base Generates Substantial Free Cash Flow Characterized by safe and reliable operations Stable base production 2012-2016 340 MBOED Libyan production ramping up in 2012 CAPEX 1.3 B per year Constantly…
  6. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 6
    High Liquids Content 2011 Liquids as % of Total Production High leverage to liquids Source: Company annual reports Includes OSM results for applicable companies Comparator group contains: APA, APC, CHK, DVN, ECA, EOG, HES, MRO, MUR,…
  7. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 7
    Very Competitive E&P Cost Structure MRO 6 on Total Expenses High leverage to liquids MRO 1 on Total Expenses Competitive cost structure excluding non-cash items Total Expense = Production + S&H + Exploration + DD&A expense +…
  8. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 8
    High Income per Barrel Business 2011 Income per BOE High leverage to liquids Competitive cost structure Fourth highest income per BOE Source: Company annual reports Includes OSM results and excludes R&M income and discontinued…
  9. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 9
    Continued Focus on Returns 2011 ROCE High leverage to liquids Competitive cost structure Fourth highest income per BOE Liquids focus and high income per BOE drive strong ROCE Source: Company annual reports Includes OSM results…
  10. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 10
    Growth Assets Significant Low Risk Production Growth 50% CAGR 80% 80% Liquids CAPEX 3.0B - 3.8B per year Marathon Oil Corporation 11
  11. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 11
    Eagle Ford Shale Premier U.S. Resource Play Strong operated position currently 305,000 net acres Approximately 90% operated with 80% average working interest 17 Rigs currently operating 18 by May 2012, under contract 4 Dedicated…
  12. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 12
    Eagle Ford Shale Current and Forecast Activity Projected Net Production Oil Egbert Miller 1H, 58% WI 24-hr IP: 1,000 MCFD Condensate 800 BOPD, 100 BNGLPD Dry Gas 2 2 Medina Jonas A 1H, 58% WI 24-hr IP: 650 MCFD 1,100 BOPD,…
  13. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 13
    Eagle Ford Shale Ahead of Schedule on Activity Growth Basin entry and rapid activity growth Rig & Frac Crew Count 20 8 Optimization of activity will drive production Adjusting efficiency 15 6 ws Riggs Early Frac Crew E l…
  14. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 14
    Eagle Ford Shale 2012 Spacing Pilot Program Five spacing pilots planned in 2012 350 20+ producing wells in 2012 40-acre spacing test Vertical observation wells in pilot test to monitor pressure depletion PAD 1 Testing well…
  15. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 15
    Bakken Shale Delivering Growth and Efficiency 416,000 net acres Average MRO-op WI 81% / OBO WI 11% P50 Net resource 350 MMBOE 420-640 acre average well spacing Increased program activity 8 Rigs currently drilling 2 Dedicated frac…
  16. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 16
    Bakken Shale Delivering Growth and Efficiency Wegner 34-11H, 70% WI Completing Diomedes Ostlund 11-14H, 100% WI Rig Location 24-hr IP: 2,045 BOED Wakelum 31-3TF, 99% WI MRO-Op Well 24-hr IP: 2,432 BOED Ostlund 11-14TFH,…
  17. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 17
    Bakken Shale Continual Improvement Reserves & Production Projected Net Production Increased EUR estimates Adopted 30-stage completions as standard Modified frac fluid volumes Total P50 resource increased from 133 133 MMBOE to 350…
  18. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 18
    Bakken Shale Three Forks Results & Forward Plans Date 1st BOPD MCFD BOED Well Prod. 24 hr IP 24 hr IP 24 hr IP Bears Ghost USA 31-4TFH Jan-12 1259 1397 1492 Myrmidon y Boy Chief USA 11-15TFH Jan-12 730 792 862 Aeneas Jessica…
  19. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 19
    Anadarko Woodford Shale Expanding Legacy Position in Liquids 164,000 net acres Average MRO-op WI 55% / OBO WI 20% P50 Resource potential 300 MMBOE 160 acre average well spacing Planned program activity 6 rigs currently drilling…
  20. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 20
    Anadarko Woodford Shale Expanding Legacy Position in Liquids Roser, 95% WI 24-hr IP: 500 MCFD (shrunk) 273 BOPD, 58 BNGLD M l 8% WI Mosely, 24-hr IP: 1,600 MCFD (shrunk) 198 BOPD, 115 BNGLD Patricia, 57% WI 24-hr IP: 2,800…
  21. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 21
    DJ Basin (Niobrara) Emerging Growth Play 144,000 net acres Successfully de-risked play through 70/30 joint venture Joint venture recouped entire initial investment Average MRO-op WI 55% / OBO WI 15% Continuing to core up acreage…
  22. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 22
    DJ Basin (Niobrara) Emerging Growth Play Corn Creek 1, 70% WI Flowing back Corn Creek Rig Location Antelope Draw 1, 70% WI Flowing back Horizontal Well Hawk Springs Wells to be Completed Antelope Rawhide D Draw Flats…
  23. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 23
    Angola Block 31, 10% WI MRO acreage PSVM Development Oil discovery Conversion FPSO, 150 MBOED BLOCK 31 PSVM FPSO integration and sail-away complete, 10% WI Marte Development Leda Venus Area vessel arrived in Angola February…
  24. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 24
    Canada In-situ Birchwood appraisal MRO-op, 100% WI 14 14,000 000 net acres Namur Pierre 60% WI 400 MMBBL Bitumen net P50 resource River Appraisal drilling completed March 2011 100 100 wells drilled and evaluated Jackpine 2…
  25. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 25
    Exploration Drilling The Gulf of Mexico has a 2012 Drilling Program portfolio of 20 prospects for drilling multiple opportunities Poland Kurdistan has a portfolio of 6 Wells seven very large exploration prospects defined on four…
  26. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 26
    Gulf of Mexico Resuming Operations 20 Prospects with 1 BBOE net unrisked mean resource 42% Miocene 52% Paleogene 6% Jurassic Avg. WI - 50% 14 of the 20 prospects MRO operated Post-moratorium drilling Petroneus activity…
  27. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 27
    Iraqi Kurdistan Region Emerging Impact Play High impact potential Underexplored surface anticlines 70 % exploration success rate Turkey Discovery sizes of 100 MMBOE to 2 BBOE S ria Syria Iran Early onshore entry for MRO Sarsang…
  28. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 28
    Poland Frontier Unconventional Play Frontier high impact potential 3 basins of Ordovician-Silurian shales 100 600 thick, 6,500 15,000 drill depth Total organic carbon (TOC) range of 2-6% identified from pre-1980 wells with cores p…
  29. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 29
    Driving Growth and Value Strong financial position Fund CAPEX from cash flows Continued focus on high grading portfolio through divestitures 3.5 Billion of transaction value divested 2006 2010 Target additional 1.5 - 3.0 billion…
  30. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 30
    Strong Dividend Enhances Total Shareholder Return Annualized Indicative Dividend Yield 3/20/12 Source: Bloomberg for competitors Comparator group contains: APA, APC, CHK, DVN, ECA, EOG, HES, MRO, MUR, NBL, OXY, TLM Marathon Oil…
  31. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 31
    Appendix Marathon Oil Corporation
  32. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 32
    Definitions Term Definition BBL Barrel BBOIP Billions of barrels of oil in place BNGLPD Barrels of NGL per day BOED Barrels of oil equivalent per day BOPD Barrels of oil per day EG Equatorial Guinea EG LNG Equatorial Guinea…
  33. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 33
    Definitions Term Definition GOR Gas to oil ratio HES Hess Corporation HH Henry Hub natural gas spot price IG Integrated Gas, one of MROs three business segments In-situ Oil sands too deep for mining that require in-place…
  34. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 34
    Definitions Term Definition MBLHCD Thousand barrels of liquid hydrocarbons per day MBOED Thousand barrels of oil equivalent per day MBOPD Thousand barrels of oil per day MCFD Thousand cubic feet per day MM Million MMBBL…
  35. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 35
    Definitions Term Definition MUR Murphy Oil Corporation NBL Noble Energy NGL Natural gas liquids NPV/I Net present value divided by investment OBO Operated by others Oil Sands Mining or The business segment through which MROs…
  36. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 36
    Definitions Term Definition Resources Total Resource represents an optimistic estimate of quantities of recoverable oil, including both reserves and those volumes expected to be recovered but that cannot yyet be classified as…
  37. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 37
    Definitions Term Definition WAHA Libyan WAHA concession WTI West Texas Intermediate crude, type of crude oil used as a benchmark in oil pricing WI Working interest Yr. Year YE Year end YTD Year to date Marathon Oil…
  38. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 38
    U.S. Resource Position Backbone of Growth Anadarko DJ Basin Eagle Ford* Bakken Woodford* (Niobrara)* Net acres 305,000 416,000 164,000 144,000 Potential gross wells 2,200-4,400 2,000-2,250 1,800-2,000 600-800 81% MRO-OP 55% MRO-OP…
  39. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 39
    Net Liquid Hydrocarbon Sales MBOPD Net Liquid Hydrocarbon sales Year Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year (MBD) 2009 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 United States B kk Bakken 9 11 11 12 14 12 13…
  40. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 40
    Net Natural Gas Sales MMCFD Year Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year Net Natural Gas Sales (MMCFD) 2009 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 United States Alaska 87 108 91 90 128 104 126 87 72 92 94…
  41. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 41
    Total Worldwide LHC & Natural Gas Sales MBOED Year Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year Sales (MBOED) 2009 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 United States Alaska 15 18 15 15 21 17 21 15 12 16 16…
  42. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 42
    Select Balance Sheet / Cash Flow Data (B unless otherwise noted) 2011 1Q 2Q 3Q 4Q As of quarter ended: Cash and cash equivalents 5.7 4.7 4.6 0.5 Total debt 8.3 5.0 5.0 4.8 Cash-adjusted total debt 2.6 0.3 0.4 4.3 Stockholders…
  43. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 43
    Reserve Replacement Estimated Net Proved Reserves E&P OSM TOTAL Natural Synthetic % Proved Liquids Total Total Category Gas Crude Oil Developed (mmbbl) (mmboe) (mmboe) (bcf) (mmbbl) of Total As of Dec 31, 2010 630 2,617 1,066 572…
  44. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 44
    Advantaged Liquids Position 2011 International Liquids as % of Total Liquids Production High leverage to liquids Strong leverage to Brent Source: Company annual reports Includes OSM results for applicable companies Comparator group…
  45. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 45
    Libya Update Summary Production reinstated in November 2011 Liftings resumed January 3rd, MRO had 3 liftings in Q1 Currently producing from all major fields at an average daily rate of 300 MBOPD gross (350 MBOPD pre-conflict)…
  46. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 46
    Driving Growth and Value Liquids Rich Shale Resource Plays Focused on North America liquids growth Developed low risk liquids rich shale play position Established top-tier position in core of Eagle Ford play Improved reserve…
  47. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 47
    Lower 48 Onshore Production Forecast Available for Sale 150 125 P90 P10 100 MBOED D 75 50 25 0 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 Actual Actual Marathon Oil Corporation 48
  48. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 48
    Eagle Ford Shale Single Well Economics Condensate High-GOR Oil Low-GOR Oil (3,000-100,000 scf/BBL GOR) (500-3,000 scf/BBL GOR)…
  49. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 49
    Eagle Ford Shale Midstream Development to Support Growth Building out acquired midstream assets to support development activity Anticipate moving up to 60% of oil May Station Oil Terminal production into pipelines by Q2 2012 Each…
  50. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 50
    Eagle Ford Shale Focus Activity in High-Value Areas 2012 Wells Spud Q1 34 Q2 41 Q3 39 Q4 39 Total 153 2012 Wells Spud 2012 Spud Q1 7 Q2 11 Focused development strategy Q3 12 Q4 18 Early 2012 activity driven by…
  51. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 51
    Bakken Shale Single Well Economics Aeneas / Myrmidon Hector / Ajax IP 30 day (BOED) 560 350 EUR (MBOE) 570 500 % Liquids 93% 95% Liquid Revenue % 98% 98% Gross Cost MM 8.6 8.6 (includes facility costs) Acre Spacing 420 420…
  52. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 52
    Bakken Shale Continuous Improvement - Drilling Rigs setting new performance benchmarks Bakken Drilling Efficiencies H&P 257 9/11 Spud to Total Depth (TD) in 70 210 Rig Count ud-Spud / Spud-TTD, Days 204 16.08 days 60 60 56 185…
  53. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 53
    Bakken Shale Export Capacity Williston illi Basin i Oilil Production d i & Export Capacity i Current take away capacity tight 2.50 2.25 Today However. capacity increase 2.00 progresses 1.75 Rail Capacity, MMBOPD D…
  54. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 54
    Canada Athabasca Oil Sands Project (AOSP) 20% Working Interest Integrated mine & upgrader 1.6 Billion BBLS Bitumen net P50 resource 255 MBD gross production capacity Namur Pierre 60% WI 51 MBD net pre-royalty River Additional 21…
  55. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 55
    Equatorial Guinea Alba Field & LPG, EGLNG, & Methanol - Long Lived Asset 2011 Net Sales 38 MBLHCD & 443 MMCFD Alba Alb Field Fi ld 63% WI & Operator 548 MMBOE P50 net resource 379 MMBOE net proved reserves at 12/31/11 Alba LPG…
  56. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 56
    Norway Alvheim FPSO - Outperforming Expectations Alvheim & Volund 65% WI & Operator Vilje 47% WI Full field development cost of 13.5/BOE 173 MMBOE P50 net resource at 12/31/11 84 % Liquids 99 MMBOE produced through 12/31/11…
  57. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 57
    Harir Mountain and Mirawa Prospects Harir Block, Kurdistan Mirawa Harir Mountain Line 14 msl km +1 Cretaceous Tertiary 0 Jurassic -1 Triassic -2 -3 2km 80% WI (100% Paying Interest) & operator Harir Block Harir Mtn Section…
  58. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 58
    Gulf of Mexico Kilchurn Prospect Green Canyon Miocene SW GC403 GC404 NE Kilchurn SALT Top Miocene U. Mio 1 U. Mio 2 U. Mio 3 Salt Weld 6 miles 30% WI, Statoil operator, currently drilling WD 3,200, PTD 25,700 Three-way…
  59. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 59
    Gulf of Mexico Gunflint Appraisal Mississippi Canyon Miocene NW MC948 MC993 SE Gunflint Innsbruck MC948 3 2 Salt Oli Oligocene M. Mio Oligocene 15.25% WI, Noble operator, currently drilling 6 miles WD 6,060, PTD…
  60. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 60
    Gulf of Mexico Innsbruck Prospect Mississippi Canyon Miocene NW MC948 MC993 SE Gunflint Innsbruck MC948 3 2 Salt Oli Oligocene M. Mio Oligocene 45% WI and operator 6 miles WD 6,290, PTD 29,000 Three-way Th…
  61. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 61
    Gulf of Mexico Key Largo Prospect Walker Ridge Paleogene S WR622 WR578 N Key Largo (Proposed) SALT 6 miles Cretaceous 60% WI and operator WD 6,900, PTD 32,700 Three-way closure against massive salt W of Julia and NW of…
  62. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 62
    Kurdistan Oil Sales and Logistics (as of April 2012) Exported Kurdish crude transported north to Turkey via Kirkuk-Ceyhan pipeline Central Government controlled SOMO (State Oil Marketing Company) holds export sales monopoly for all…
  63. IPAA OGIS 2012 Energy Conference – Marathon Oil Corp – slide 63
    Estimated 2012 Production & Tax Rates by Jurisdiction Approximate Effective Tax Statutory Tax Jurisdiction Production % Rate Rate U.S. 38 30% - 40% 35% Norway 19 68% - 78%* 78% EG 27 23% - 33%* 25% Angola 1 45% - 55% 50% UK…

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